A pericentric chromosome 16 inversion, inv(16)(p13;q22), is present in almost 100% of patients with the M4Eo subtype of acute myeloid leukemia. A fusion gene between CBFB, the gene for a subunit of transcription factor CBF/PEBP2, and MYH11, which codes for smooth muscle myosin heavy chain, is generated by this chromosome 16 inversion. This fusion gene is believed to play a key role in leukemogenesis. We recapitulated this fusion gene in mice by inserting a human MYH11 cDNA into mouse Cbfb gene by homologous recombination (denoted "knock-in", or KI). Embryos heterozygous for the Cbfb-MYH11 fusion gene had defects in both primitive and definitive hematopoiesis and died in midgestation due to widespread CNS hemorrhages. In the chimeric mice, hematopoietic cells with the KI gene have defects in myeloid and lymphoid differentiation and maturation. The chimeric mice developed lymphoma after a long latency period and, with ENU treatment to induce mutations, developed acute leukemia after short latency. These latest results suggest that Cbfb-MYH11 is necessary but not sufficient for leukemogenesis. Current investigation focuses on identification of additional genetic changes required for leukemogenesis. Using green fluorescent protein and immunofluorescence we have demonstrated that CBFb- SMMHC, the fusion protein produced by CBFB-MYH11, can sequester CBFa2 into abnormal cytoplasmic locations in a transient transfection system. This observed CBFa sequestration may explain the dominant negative function of this inv16 fusion protein. We have further mapped the functional domains of CBFb- SMMHC responsible for this sequestration. In addition, we used an in vivo system to confirm that this sequestration is also taking place at endogenous protein concentrations. We are currently testing whether this sequestration directly results in dominant negative suppression of CBF function.